Archive for April, 2017

No matter what your job is and how much you earn, you need to know the taxation system in the United States. You cannot memorize all of the taxation codes and other legal terms involved here but you need to know the basics of what type of taxes you need to pay and understand how it is being computed.

If you own a Fort Lauderdale luxury home, you will be subject to pay a real estate tax. If you are a person working in the real estate industry or you’re just selling or buying a new house, it is very important that you have an understanding of real estate tax law. If you are working in real estate in Florida, you need to be guided by the following important information.

Florida has one of the lowest tax burdens compared to other states. In Florida, the government does not levy a personal income tax. Most of its non-federal revenue comes from property taxes which is just 1.5 percent of the property’s value per annum. Income from rent is subject to tax which is charged at sliding variable (around 15-34 percent) depending on the amount.

The following tax often shows up in a real estate transaction:

Property Tax

There is a property tax being collected every year. It is about 1.6% of the property value as of January 1st of that year. The rates may vary from one county to another. However, you may be exempted from paying Property Tax if you qualify under the following scenarios: homestead exemptions, Senior Citizen, a blind person, total and permanent disability, and veteran exemptions.

Income Tax

Any income earned in the United States will be taxed. Buyers need to get ITIN (Individual Taxpayer Identification Number) and file a tax return every year. The income tax can range from 5% to 10% of the INCOME portion of proceeds.

Capital Gains Tax

If the property will be sold later, the profit is calculated and 15% of it will go to capital gains tax.

Sales Tax

Tenants who will rent a condo for six months or less need to pay the owner 6% sales tax. On top of that, the tenant also needs to pay 5% more on tourist sales tax. The owner will then pay the rent to the local government. (This is the reason short term rentals are not recommended).

It is important to note that even foreigners who will buy a property in the United States will be subjected to these taxes as well. When buying a house in Fort Lauderdale it is best to ask your real estate agent, or a lawyer what sort of taxes you’ll be subjected to in order to be well informed.

Civil law and criminal law are on different spectrums of the legal scope. Civil deals with an aspect of crimes that focus more on threats, harms or danger to the welfare of citizens. As a result, getting sued for one civil offense or the other is a long process involving a substantial amount of legal fees and loss of credibility, therefore, it should be feared.

In the case of civil litigations arising, the cause can often be pinpointed to be arising from everyday disputes between individuals that can relate from anything to property or society. An example may involve that of a tenant and another tenant leading to legal grounds for filing a suit.

Taking a Closer Look

When looking at civil tax litigation, this is usually arising from issues relating to tax fraud and often filed by the IRS if all attempts to reach an agreement with the defendant prove futile. These attempts include failure to respond to correspondence audit and lack of irrefutable justification during an office audit. Dallas litigation lawyer, Lawrence Brown, often advises his clients to always check their mail when undergoing an audit, so as to not miss out on any important information.

It is important to note that the act of getting sued does not mean a court case is eminent and this is further proven by statistics that prove a majority of cases involving civil tax litigations fail to make it to trial. A roundup of 95% of cases are resolved outside the court and then dismissed without having to face a jury system or judge.

What to Avoid

Civil tax litigations should avoid the whole blame game especially when it involves company law as the court process can prove lengthy and impact on the image of the company negatively. On the part of the IRS, filing civil tax litigation is usually justified as there are processes to this but for an individual, it is important to consider all aspects of responsibility and accountability before letting it go to the court stage. The individual involved should make use of the tool of communication and discuss the unresolved issues such as infringement of tax laws unless the issue at hand is one too big to be resolved in-house. Also, litigation is heavy in the pocket. So before embarking on this journey, one must prudently explore all avenues of negotiation. The IRS knowing full well that government resources should not be expended on just any case would most likely be willing to come to an agreement not involving the courts as long as it is in line with the rule of law.

Solutions

A means by which these cases can be resolved is by a Dispute Resolution System which was launched a few years ago in a bid to get more out of court settlements.

This involves mediation and arbitration as an alternative to civil tax litigation. This process saves both time and resources as well as being less expensive. The two disputing parties which are often the IRS and citizen or company can participate in the process in order to consider the consequences, reach a settlement and control the outcome of the case.